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Call Updates

CNOOC Ltd - CEO - close: 84.79 change: -0.05 stop: 82.89

A rebound in crude oil back over $60 a barrel and widespread market strength helped power the oil sectors higher on Monday. Unfortunately, CEO failed to participate in the rally. The stock actually gapped down this morning before slowly inching higher. We remain on the sidelines and we're waiting for a breakout over resistance at the $85.00 level. Our suggested entry point to buy calls is at $85.25. If triggered our target is the $89.50-90.00 range.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 264 thousand

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Cerner Corp. - CERN - close: 48.95 chg: -0.14 stop: 46.90

Networking giant CSCO turned in an impressive 3.8% gain one day ahead of its earnings report. This fueled a 2.3% gain in the NWX networking index. Yet strangely shares of CERN, a networking company, failed to participate in today's rally. This should set off warning signals for investors. We expected potential resistance at the $50.00 mark so a pull back toward $48 could be in the cards. Our target is the $52.00-52.50 range.

Picked on October 30 at $ 48.05
Change since picked: 0.90
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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GlobalSantaFe - GSF - close: 54.30 chg: 1.91 stop: 49.39

Crude oil futures rebounded higher on Monday and broke out back above $60 a barrel thanks in part to more talk from OPEC about cuts to support oil prices. The rising oil and a broad market rally helped oil stocks rush higher. The OSX oil services index rose 1.45%. Shares of GSF really out performed its peers with a 3.6% gain to close over minor resistance at $54.00. Don't be surprised to see GSF pull back on profit taking when it hits the 200-dma near $55 soon. Our target is the $57.50-58.00 range.

Picked on November 05 at $ 52.39
Change since picked: 1.91
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 3.4 million

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Holly Corp. - HOC - close: 50.06 change: -0.69 stop: 46.99

We were a little surprised by HOC's relative weakness on Monday. The intraday bounce from its lows near $49.35 is bullish but shares still closed down 1.3%. More aggressive traders may want to buy the dip but more conservative traders may want to see a new relative high first (over $51.10). Our target is the $54.90-55.00 range.

Picked on November 05 at $ 50.75
Change since picked: - 0.69
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.1 million

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NTL Inc. - NTLI - close: 27.33 chg: 0.45 stop: 26.75 *new*

Tomorrow is our last day for NTLI. We're planning to exit on Tuesday at the closing bell to avoid the company's earnings report on Wednesday. We're going to raise our stop loss to $26.75 to reduce our risk. Our target was the $29-30 range.

Picked on October 26 at $ 27.41
Change since picked: - 0.08
Earnings Date 11/08/06 (confirmed)
Average Daily Volume = 2.4 million

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Petroleo Brasileiro - PBR - cls: 90.35 chg: 1.41 stop: 85.65

We did not have to wait very long for PBR to hit our trigger. The rally in oil and oil stocks today produced a 1.58% gain in PBR and a breakout over the $90 level. Our suggested trigger to buy calls was at $90.05. Now that the play is open our target is the $95.00-96.00 range. FYI: PBR is a Brasilian stock traded as an ADR here in the U.S. One risk traders are facing is the company's earnings report. We cannot find a specific date or even a history of recent earnings reports. The risk is that they announce a negative report while we're trading them.

Picked on November 06 at $ 90.05
Change since picked: 0.30
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Transocean - RIG - close: 76.52 change: 1.45 stop: 69.99

RIG is another oil service stock that powered higher thanks to strength in crude oil and the widespread market rally. Shares rose 1.9% and managed to breakout over technical resistance at its 200-dma. We have two targets. Our conservative target is the $79.50 level. Our aggressive target is the $84.00 level.

Picked on November 05 at $ 75.07
Change since picked: 1.45
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 7.6 million

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Schlumberger - SLB - cls: 64.35 chg: 0.85 stop: 60.95

SLB is yet another oil service stock that posted gains on Monday. Shares rose 1.3% and look poised to hit new relative highs soon. Our target is the $67.50-68.00 range. SLB is an oil services company and the services sector tends to be a little more volatile than the rest of the oil sector.

Picked on November 05 at $ 63.50
Change since picked: 0.85
Earnings Date 10/20/06 (confirmed)
Average Daily Volume = 9.8 million

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Vimpel Comm. - VIP - close: 64.99 chg: 0.82 stop: 62.49

VIP's bounce on Monday may have been a temporary reprieve from the recent profit taking. We're not suggesting new positions and more conservative traders may want to exit early here. Don't forget that we're dealing with a rising risk environment due to the earnings report. The company is expected to report this month but we can't find a specific date. Estimates for when VIP will announce range from November 7th to November 23rd. Our target is the $67.50-70.00 range.

Picked on October 12 at $ 62.17
Change since picked: 2.82
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 106.25 chg: 0.63 stop: 110.01

ACL spiked lower this morning but shares managed to rally back into the green and erase Friday's loss by the closing bell. As a drug company ACL could get pushed around tomorrow and Wednesday as investors react to every sound byte about which party might be winning the mid-term elections. The overall pattern remains bearish but ACL is somewhat short-term oversold and due for a bounce. More conservative traders may want to tighten their stops toward the $108 level. Our target is the $100.10-100.00 range.

Picked on October 31 at $105.75
Change since picked: 0.50
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

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Advanced Micro Dev. - AMD - cls: 21.39 chg: 0.51 stop: 22.05

Attention! It may be time to abandon ship with this put play in AMD. The SOX just produced a strong bounce from support and the NASDAQ doesn't look ready to give up its bullish trend just yet. AMD still has resistance near $22.00 but more conservative traders may want to cut their losses right here. We're going to ride it out and see what happens. We're not suggesting new positions with AMD above $20 at this time. Our target is the $17.50-17.00 range.

Picked on October 29 at $ 20.86
Change since picked: 0.53
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

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Amazon.com - AMZN - close: 38.21 chg: 0.75 stop: 40.25

A strong day for the Internet stocks and a new relative high for the INX Internet sector helped AMZN produce a positive session. AMZN bounced from its recent test of the rising 10-dma and shares are once again challenging resistance at the $39.00 level. Readers can choose to wait and watch for a failed rally under $39.00 (or $40 if it occurs) as a new entry point. We're using a relatively wide stop loss above $40 to give AMZN room to maneuver. Our target is the $35.00-34.00 range.

Picked on October 29 at $ 38.24
Change since picked: - 0.03
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

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Cardinal Health - CAH - cls: 64.18 chg: 0.92 stop: 64.85

The rampant strength in stocks today helped CAH bounce from support near $63.00. Volume actually came in above average on the move. We're waiting for a breakdown under support near $62.35. Our suggested entry point to buy puts is $61.99. If triggered our target is the $58.00-57.50 range. Be prepared for a bounce on CAH's initial test of the $60 level.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 million

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CDW Corp. - CDWC - cls: 65.06 chg: 1.07 stop: 66.25

Strength in technology stocks inspired a 1.6% bounce in CDWC on Monday. Shares found some resistance at the $65.50 level but looking at the intraday chart we can't tell if CDWC is poised to continue its run into Tuesday. We would wait for a failed rally near $66 or a new decline under $64 before opening new put positions. We do note potential support at its rising 50-dma near 63.25. Our target is the $60.50-60.00 range. Be advised that CDWC is hosting an analyst day on November 8th.

Picked on November 02 at $ 63.90
Change since picked: 1.16
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 762 thousand

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Capital One Finc. - COF - cls: 78.68 chg: 2.12 stop: 80.05

Financial stocks played a part in today's widespread rebound and COF got in on the act with a sharp 2.7% oversold bounce of its own. A failed rally under $80 could be used as a new bearish entry point to buy puts. Our target is the $75.10-75.00 range.

Picked on October 31 at $ 79.33
Change since picked: - 0.65
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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Centex - CTX - close: 50.34 change: -0.05 stop: 52.55

The homebuilding sector may have closed in the green but its performance today was pretty weak. The pattern for the group and CTX still looks bearish. We are suggesting a trigger to buy puts at $49.75. If triggered our target is the $45.50-45.00 range.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 2.1 million

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DIAMONDS ETF - DIA - close: 121.01 chg: 1.23 stop: 121.16

Danger! The bounce in the DJIA and 1% rebound in the DIA diamonds has apparently produced a buy signal or a bullish breakout from what now appears to be a bull flag pattern. More conservative traders may want to exit early if they can. Odds are good that we'll be stopped out tomorrow morning at $121.16. We're not suggesting new put positions.

Picked on November 02 at $119.80
Change since picked: 1.21
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 6.6 million

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Intercont.Exchange - ICE - cls: 84.90 chg: 3.15 stop: 82.55

ICE bounced strongly on Monday with a 3.8% gain thanks to strength in the financials. We're still on the sidelines. It is our plan to buy puts on a breakdown under support at the $80 level. Our suggested entry point is at $79.85. If triggered our target is the $75.15-75.00 range. More conservative traders may want to exit at the rising 50-dma near $75. FYI: A decline under $81.00 would reverse the P&F chart into a new sell signal. More aggressive traders may want to consider opening early positions under $81.00.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 1.6 million

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Lehman Brothers - LEH - cls: 76.15 chg: 1.72 stop: 77.01

Wow! Today really was a merger Monday. A number of bid deals were announced today and the broker-dealers naturally saw a positive reaction. The XBD broker-dealer index rose 2.57% and shares of LEH paced the move with a 2.3% gain of its own. The stock erased Friday's decline but it did not break Friday's bearish engulfing candlestick pattern. The move today looks dangerous for the bears so we would wait for a new decline under $74.50 before considering new put positions. Our target is the $70.25-70.00 range.

Picked on November 05 at $ 74.43
Change since picked: 1.72
Earnings Date 12/13/06 (unconfirmed)
Average Daily Volume = 3.6 million

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PACCAR Inc. - PCAR - cls: 58.53 chg: -0.68 stop: 60.55*new*

Caution! Over the weekend we suggested that PCAR was poised to bounce higher. Fortunately, the rebound failed at $60.00 resistance but short-term technicals are inching higher from oversold conditions. If the major market indices continue to rally tomorrow we could see PCAR breakout over the $60 level. More conservative traders may want to tighten their stops toward $60. We're going to move our stop to $60.55. Currently our target is the $56.00-55.50 range.

Picked on October 29 at $ 59.42
Change since picked: - 0.89
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 1.4 million

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Pantry Inc. - PTRY - close: 52.04 change: -0.27 stop: 56.01

Shares of PTRY continue to under perform. The stock lost another 0.5% on Monday with volume coming in above average on the decline (which is bearish). We don't see any changes from our weekend update. Our target is the $48.00-47.00 range but we do expect a bounce on PTRY's initial test of the $50 level. We do not want to hold over the November 16th earnings report.

Picked on October 29 at $ 54.05
Change since picked: - 2.01
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

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NASDAQ-100 ETF - QQQQ - cls: 42.54 chg: 0.61 stop: 42.81

A pervasive rally in tech stocks produced a sharp rebound in the QQQQ. We came close to being stopped out but the rally ran out of steam at $42.71. If the markets see any follow through higher tomorrow we would expect to be stopped out. We're not suggesting new positions at this time. Our target was the $40.25-40.00 range.

Picked on November 02 at $ 41.75
Change since picked: 0.79
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 106 million

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Semiconductor HOLDRs - SMH - cls: 33.59 chg: 0.63 stop: 34.15

A strong bounce in the SOX semiconductor index was surpassed by an even stronger rebound in the SMH holders ( 1.9%). More conservative traders may want to tighten their stops since this could be a bullish reversal following last week's bearish breakdown! We're not suggesting new positions at this time.

Picked on November 03 at $ 32.95
Change since picked: 0.64
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 17.7 million

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Univ.Forest Prod. - UFPI - cls: 44.83 chg: 1.02 stop: 48.05

After three weeks of losses UFPI is finally seeing something of an oversold bounce. However, the stock is still trading under its 10-dma so we wouldn't panic yet. More conservative traders may want to think about tightening their stops toward the $46 level. We're not suggesting new positions at this time. We're aiming for a decline into the $41.00-40.00 range.

Picked on October 24 at $ 46.13
Change since picked: - 1.30
Earnings Date 10/16/06 (confirmed)
Average Daily Volume = 192 thousand
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

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Bear Stearns - BSC - cls: 149.27 chg: 2.58 stop: n/a

A merger Monday with several big deals being announced fueled a big bounce in the broker-dealers. BSC added 1.75% but failed to breakout over the $150 level. We're not suggesting new positions at this time. The options in our strangle are the November 155 call (BSC-KK) and the November 145 put (BSC-WI). Our estimated cost was $4.00. We're planning to exit if either option rises to $6.00 or more. FYI: Don't forget that November strikes expire in less than three weeks.

Picked on October 22 at $150.19
Change since picked: - 0.92
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Cephalon - CEPH - close: 71.91 change: 1.66 stop: n/a

CEPH is finally seeing a breakout from its recent trading range. The stock rose 2.3% and closed at a new seven-month high. We're not suggesting new positions at this time. The options in our strangle are the December $75 call (CQE-LO) and the December $65 put (CQE-XM). Our estimated cost was $3.45. We plan to see if either option rises to $4.90 or more.

Picked on October 29 at $ 69.35
Change since picked: 2.56
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 61.05 chg: 0.08 stop: n/a

Lack of directional movement in COP is killing this strangle play. Over the weekend we adjusted our target to breakeven at $1.15 but more conservative traders may want to try and exit at a fraction of our estimated cost (50%, 75%, etc). We're not suggesting new positions. Our suggested options were the November $65 call (COP-KM) and the November $55 put (COP-WK).

Picked on October 15 at $ 60.03
Change since picked: 1.02
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 35.85 chg: 0.08 stop: n/a

NILE produced a very weak bounce considering its declines last week. We're not suggesting new positions at this time. Our estimated cost was $2.40 and we're planning to sell if either side of our strangle rises to $3.90. The options in our suggested strangle are the January $45 call (JWU-AI) and the January $35 put (JWU-MG).

Picked on October 29 at $ 38.92
Change since picked: - 3.07
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Frontier Oil - FTO - close: 31.24 change: 0.13 stop: 28.90

It was our plan to exit FTO today at the closing bell to avoid holding over the company's earnings report expected tomorrow. Wall Street is looking for FTO to report $1.07 a share.

Picked on October 15 at $ 28.90
Change since picked: 2.34
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 3.2 million
 

Dropped Puts

NewMarket - NEU - close: 65.06 change: 2.92 stop: 67.05

The bounce in NEU was too strong for us. After last week's decline the stock recouped most of its losses with today's 4.69% gain. This looks too much like a short-term bullish reversal so we're suggesting an early exit to limit losses.

Picked on October 31 at $ 64.30
Change since picked: 0.76
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 354 thousand
 

Dropped Strangles

None
 

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